Transporting New Zealand is warning that delaying fuel tax increases could lead to more potholes and a less resilient road network as maintenance costs continue to climb.
The road freight industry association’s chief executive Dom Kalasih made the comments in an interview with Newstalk ZB’s Ryan Bridge following Labour’s pledge to freeze fuel excise for three years if elected in November.
The Government has since cancelled the 12 cents a litre fuel excise increase that was due to take effect on January 1, 2027, just days after Labour announced its policy.
Kalasih says maintaining a reliable road network is important for economic prosperity, productivity and safety, and warns against deferring the investment needed to maintain it.
“Our concern is that any holding off on roading investment, it’s false economy. It’s like delaying going to the dentist. Short-term gain for long-term pain,” he says.
Kalasih says fuel excise is charged at a fixed rate per litre and has therefore fallen in real terms as the cost of maintaining roads has increased.
“If you look at the cost of road maintenance on a dollars-per-kilometre basis, from 2021 to 2025, costs increased 36%,” he says.
He says even the previously planned 22 cents a litre increase in fuel excise over three years would have represented an increase of only around 31%.
“So we’re just going backwards.”
Asked by Bridge what that would mean for the road network, Kalasih says motorists could expect “more potholes” and “probably a less resilient network”.
He also points to recent findings from the New Zealand Infrastructure Commission on the country’s return from infrastructure spending.
It found New Zealand in the bottom 10% of OECD countries for return on investment for infrastructure spend, Kalasih says.
“We just can’t keep holding off investing in key infrastructure.”
